The closer you get to operating in a truthful JIT situation, the to a greater extent responsive you are to your customers and the little capital you have tied up in novel materials and finished goods inventory. The less you spend to store and carry inventory, the less obsolescence you have to lay aside off, and the better you can optimize your transportation and logistics operations. Ultimately, this all translates into providence your company real money.
The downside of JIT is that it is a continuum; the closer you get to it, the to a greater extent beneficial it is to your stock. But go too far and tighten up inventories too far, the less beneficial it is for your business. Too much or too little inventory leaves you at a competitive (or cost) disadvantage to your competitors. But if you can do it right, JIT can be a strategic source of competitive advantage.
JIT is a business strategy that requires a cross-functional team working in a coordinated fashion with common and overlapping goals and objectives.
In the JIT-based operation, everyday activities are driven by continuously replenishing the customer-demand-driven finished goods inventory targets. These targets pull or drive the production plan, the use of production assets, labor and even the re effectuateing of raw materials from suppliers or repositing/distribution operations. In essence, JIT requires production to be tied more directly to short-term customer demand patterns.
First, bulk quantities of raw materials must be handled and stored. This can tie up a great deal of capital, in addition to devouring assets and labor. Second, what happens if on that point is a problem...If you want to get a full essay, order it on our website: Ordercustompaper.com
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